Tomorrow is a much anticipated day. First day of December. I can tell you that the last 1st of December back in 2008 saw the market drop huge in a big sell off.
But admittedly the price action of the past day and a half has been the markets absorbing all the selling, while maintaining above major support, and then eventually making headway back up again as it did in the afternoon. And then as you can see on the Wilshire chart, it was stopped perhaps temporarily exactly at the head and shoulder neckline.
I would be more bearish if the market had made a beeline straight up today, but it rather put in a very workmanlike day that we have seen too often during minor and major turning points during this P2 in which it works off the selling, maintains the pivot, and makes forward progress eventually. If the market did selloff after having this familiar behavior pattern play out would help identify a trend change as it would be unexpected from what we have seen over the past 8 months.
So the bulls are trying to put itself in position to challenge 1100 again. And if it can gain 1100, it should be able to challenge its big gap down hole from 1110 - 1105 or so. And then we would see how it handles the gap.
What I don't like about the bearish side is that there is a feeling of concern and mild "panic" (VIX did jump 20% after all) with the Dubai situation, yet prices maintained rather very well. So if sentiment went too bearish too quickly, its actually bullish. Thats the "wall of worry", at least for now.
This is one night I really look forward to EWI's update as I don't have a good answer except that I expect (and hope) that the big gap down from 1110-1105 gets filled/challenged. At least thats what prices seemed to be signalling today was their intention. And of course if it conquers the gap, its only a point or so away from making a new high anyways huh?